Electric carmaker Tesla Motors priced shares in its initial public offering above the expected range on Monday, according to a market source.

The company, known for its $109,000 Roadster, sold 13.3 million shares for $17 each, the source said, raising about $226 million. It raised the number of shares it hoped to sell by 20 percent. It had planned to sell 11.1 million shares for $14 to $16 each.

Tesla Roadster Unveiled

Reuters reported earlier on Monday that investors were willing to pay $17 a share.

Palo Alto, California-based Tesla is the first U.S. car company to go public since Ford Motor made its public debut in 1956. Its debut comes amid growing interest in green technologyand battery-powered vehicles, and as major automakers are gearing up to launch electric cars.

Despite the enthusiasm for its cars, the company's business plan is fraught with risk. Tesla is facing a gap in the production of Roadster after 2011, due to tooling changes at a supplier with a next-generation car not expected until at least a year after the launch of the Model S sedan in 2012.

The company is losing money and does not expect to be profitable until it sells significant numbers of its Model S sedans. Tesla's losses widened to $29.5 million for the quarter ended March 31, from $16 million a year earlier.

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"We are a Silicon Valley company. Closer to anApple or Google than to a GM or Ford in the way we operate the company," he said.

But many analysts are skeptical, saying the shares may not appreciate in value until the company launches its second car, the Model S.

Tesla plans various cars based on the Model S, including a minivan, SUV and a mass market car, Musk said at the investor meeting, but he did not give a timeline for the launch of these vehicles.

Jeremy Anwyl, chief executive of Edmunds.com, which tracks the car market, said Tesla operates in a capital-intensive business that is highly competitive, with major automakers poised to enter the electric car market.

"They are not Google," he said last week. "They are in manufacturing."

Tesla's IPO represents about 14 percent of the company, excluding additional shares the underwriters have the option to purchase. At $17 a share, Tesla has a market capitalization of nearly $1.6 billion based on the number of shares outstanding in a regulatory filing on Monday morning.

Underwriters on the IPO were led by Goldman Sachs & Co, Morgan Stanley, JPMorgan, and Deutsche Bank Securities. The shares are expected to begin trading on the Nasdaq exchange on Tuesday under the symbol "TSLA".

Tesla said it will use the IPO proceeds to fund expansion of Tesla dealerships, for working capital and for general corporate purposes.